The Company made Preferred Equity Investments in two separate joint ventures which in turn acquired multifamily properties in the locations identified below. In accordance with GAAP, these investments are treated as loans. These investments are unsecured and are subordinate, including the payment of the returns thereon, to the mortgage debt encumbering the property acquired by the applicable joint venture. Information as to these investments at June 30, 2026 is summarized below (dollars and thousands):


Location	Investment Date	Annual Return		Current Return		Hurdle Return		Invested Amount		Redemption Date	Deferred fees
Wilmington, NC	October 2024	13	%	6.00	%	7.00	%	$	7,000	November 2031	$	(106)
Kennesaw, GA	November 2024	13	%	6.50	%	6.50	%	11,250		June 2029	(117)
								$	18,250		$	(223)

These investments provide for the Company to receive the following: (1) an (a) Annual Return (as set forth in the table above) compounded monthly, of which the Current Return (as set forth in the table above) is to be paid monthly to the extent of available cash flow, and (b) a Hurdle Return to be paid monthly from remaining cash flow if any, pari passu or after the sponsor's receipt of its management fees and specified returns on its investment and (2) the total amount invested by the Company, including any portion of the Current Return and the Hurdle Return not received by the Company, prior to any payments to the sponsor, upon the earlier to occur of certain events (e.g., sale of the property or the refinancing of the mortgage underlying the property) and the redemption date specified above. The Current Return is recorded as interest income when it is due from the sponsor and the Hurdle Return is recognized as interest income when it is received. Deferred loan fees are capitalized and recorded into income over the life of the investment. The Company's exposure to loss is limited to its original Invested Amount (as set forth in the table above).

During the three and six months ended June 30, 2026, the Company recorded $337,000 and $664,000 respectively, of interest income, representing the full amount of the Current Return (including loan fee amortization of $15,000 and $29,000, respectively), with respect to these loans. As of June 30, 2026, these loans were current in their payment of the Current Return.